Attica Bank announces the start of its merger procedures with Pancreta Bank in a statement, in which it also mentions the basic terms and the indicative timetable.

In detail, Attica Bank  announces to the investing public the following: Further to the Shareholders' Agreement dated 18 July 2024 between the Hellenic Financial Stability Fund and Thrivest Holding, The Bank has initiated the actions required to implement the more specific provisions of the Agreement and the commitments of the Shareholders for the capital strengthening of the credit institution that will result from the merger between Attica Bank and Pancreta Bank  for the purpose of implementing the business plan of New Bank and to cover the additional capital needs that will arise from the inclusion of portfolios of non-performing loans of the two banks in the Hercules III state guarantee scheme.

In this context:

• The Bank has initiated the process of securitization of a portfolio of NPLs with a total book value of €2.3bn and the inclusion of the high-priority bonds of the securitization in the Hercules III State Guarantee Programme, with a total value of €750m; 
• The Board of Directors of the Bank has decided to initiate the merger process between Attica Bank and Pancreta Bank, with the absorption of Pancretia Bank by Attica Bank, in accordance with the relevant provisions of company law, Law 2515/1997 and Law 4601/2019 as applicable and in force (the "Merger"). The Board of Directors of Pancreta Bank also made a similar decision to start the merger procedures.

MAIN TERMS

The date of the transformation balance sheet will be December 31, 2023, and the proposed exchange ratio (the "Exchange Ratio") will be calculated with the relative value of the merging companies allocated in a ratio of 90% for Attica Bank and 10% for Pancreta Bank, following an analysis and recommendation by UBS, an international independent financial institution, which is acting as a financial advisor to the Bank for the purposes of the merger.

The Exchange Agreement is subject to the receipt by the Boards of Directors of Attica Bank and Pancreta Bank of fairness opinions from independent certified public accountants as appointed in accordance with the provisions of Law 2515/1997 and Law 4601/2019.

The completion of the Merger is subject to the approval of the Merger by each of the General Meetings of the companies being merged and the receipt of the permits and approvals required by law from the competent authorities, in accordance with the provisions of the applicable legislation.

MAIN FEATURES

The Merger will bring significant benefits to Attica Bank and its shareholders:

• It is a necessary action for the subsequent capital strengthening of the credit institution resulting from the Merger, in accordance with the commitments and as provided for in the Shareholders' Agreement.
• It will lead to the creation of a single financial institution, which is expected to have an NPE ratio below 3%, by virtue of the inclusion of the NPE portfolios of the two credit institutions in the Hercules III State Guarantee Scheme.
• With the envisaged merger and the integration of the assets, clientele, branches, and staff of Pancreta Bank, the bank will further increase its competitiveness vis-à-vis other banks, significantly expand its network and operations throughout the country, and increase its turnover and subsequently its profitability.
• It will lead to economies of scale in terms of administrative costs, generally reduce operating costs, and maximise the efficiency of the merging credit institutions' management organisation.

ΤΙΜΕΤΑBLE

The merger is expected to be completed around mid-September 2024, subject to the adoption of all necessary corporate resolutions by the merging credit institutions and the required, in accordance with the law, permits and approvals of the competent authorities. In any event, the timing of the Merger is subject to unpredictable factors and is subject to change. The Bank will keep the investing public informed as to the implementation of all steps of the Shareholders' Agreement.